STERIS PLC Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On
The Merger Agreement provides that, upon the terms and subject to the conditions
set forth in the Merger Agreement, (a) prior to the closing of the transactions
contemplated therein (the "Closing"), the Company will incorporate a direct and
wholly owned subsidiary ("Canyon Newco"), (b) prior to the Closing, Canyon Newco
will incorporate a direct and wholly owned subsidiary ("Canyon Merger Sub"), (c)
immediately prior to the Closing, Canyon Merger Sub will merge with and into the
Company with the Company surviving the merger as a direct wholly owned
subsidiary of Canyon Newco (the "Pre-Closing Merger"), (d) immediately following
the Pre-Closing Merger, the Company will convert from a
At the effective time of the Pre-Closing Merger, each issued and outstanding
share of common stock of the Company (the "Company Shares") as of immediately
before the effective time of the Pre-Closing Merger will be automatically
converted into one share of common stock of Canyon Newco (the "NewCo Shares").
At the effective time of the First Merger (the "First Merger Effective Time"),
each of the issued and outstanding NewCo Share as of immediately before the
First Merger Effective Time will be automatically converted into the right to
receive (a)
As of the First Effective Time, each award of restricted stock units corresponding to Company Shares (each, a "Company RSU Award") granted under the Company's 2016 Equity Incentive Plan and the Company's 2020 Equity Incentive Plan (other than an award contemplated by clauses (a) and (b) of the next sentence) to the extent not vested will be automatically converted into a STERIS restricted stock unit award (a "STERIS RSU Award"). Each Company RSU Award (a) held by a non-employee director of the Company will be automatically converted into the right to receive the Merger Consideration in respect of each Company Share covered by such Company RSU Award and (b) that is subject to performance-based vesting conditions will be automatically converted into a STERIS RSU Award and, subject to certain conditions, vest pursuant to a schedule based on the date when the Company RSU Award was granted.
The consummation of the Mergers is subject to certain closing conditions,
including (a) the approval of the Mergers by the majority of the outstanding
Company Shares, (b) the STERIS Shares to be issued in the First Merger have been
approved for listing on the
The Merger Agreement contains customary representations, warranties, agreements and covenants, including covenants relating to (a) STERIS, the Company, and each of their respective subsidiaries' conducting their respective businesses in all material respects in the ordinary course, consistent with past practice, during the period between the execution of the Merger Agreement and the earlier of the First Merger Effective Time or the termination of the Merger Agreement, (b) STERIS and the Company using their respective reasonable best efforts, subject to certain exceptions, to obtain governmental and regulatory approvals, (c) obligations to facilitate the Company's stockholders' consideration of, and voting upon, the transactions contemplated by the Merger Agreement, and (d) the recommendation by the Company's board of directors in favor of the adoption by its stockholders of the Merger Agreement.
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The Company has agreed not to (a) solicit proposals relating to certain alternative transactions, (b) enter into discussions or negotiations or provide non-public information in connection with any proposal for an alternative transaction from a third party, or (c) approve or enter into any agreements providing for any such alternative transaction, subject to certain exceptions to permit members of the Company's board of directors to comply with their fiduciary duties under applicable law.
The Merger Agreement contains certain termination rights that may be exercised
by either STERIS or the Company, including in the event that (a) both parties
agree by mutual written consent to terminate the Merger Agreement, (b) the First
Merger is not consummated by
If the Merger Agreement is terminated (a) by (i) STERIS or the Company as a
result of the approval required from the Company's stockholders not being
obtained, (ii) a "Competing Proposal" (as that term is defined in the Merger
Agreement) was publicly disclosed and not publicly withdrawn prior to the date
of the Company stockholder meeting and (iii) (A) any Competing Proposal is
consummated within 12 months of such termination or (B) the Company enters into
a definitive agreement providing for a Competing Proposal within 12 months of
such termination, (b) by STERIS as a result of a change in the recommendation of
the Company's board of directors or (c) by the Company in order to enter into a
"Superior Proposal" (as that term is defined in the Merger Agreement), then the
Company will pay to STERIS a fee of
In connection with the entry into the Merger Agreement and the Transaction,
STERIS has entered into a bridge financing commitment, dated
Voting Agreement
Concurrently with the execution of the Merger Agreement, STERIS, US Holdco,
Crystal Merger Sub,
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. . . Item 8.01 Other Events.
On
On
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits: Exhibit No. Description 2.1 Agreement and Plan of Merger, datedJanuary 12, 2021 , by and amongSTERIS plc ,Solar New US Holding Co, LLC , Crystal Merger Sub 1, LLC and Cantel Medical Corp. 10.1 Voting Agreement, datedJanuary 12, 2021 , by and amongSTERIS plc , SolarNew US Holding Co, LLC , Crystal Merger Sub 1,LLC, Charles M. Diker, Mark N. Diker and Diker Management LLC . 99.1 Press Release, datedJanuary 12, 2021 . 99.2 Investor Presentation, datedJanuary 12, 2021 . 99.3 CEO Letter to STERIS Employees, datedJanuary 12, 2021 . 99.4 CEO Letter to Cantel Employees, datedJanuary 12, 2021 . 99.5 STERIS Employee FAQ, datedJanuary 12, 2021 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) No Offer or Solicitation
This announcement is for informational purposes only and is not an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities, nor the solicitation of any vote or approval in any jurisdiction pursuant to the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
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Additional Information and Where to Find It
In connection with the proposed transaction, STERIS will file a registration
statement on Form S-4 with the
Participants in Solicitation
STERIS, the Company and their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies in respect of the
proposed transaction. Information concerning STERIS's participants is set forth
in the proxy statement, filed
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the federal securities laws about STERIS, the Company and the proposed transaction. Forward-looking statements speak only as to the date the statement is made and may be identified by the use of forward-looking terms such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "targets," "forecasts," "outlook," "impact," "potential," "confidence," "improve," "optimistic," "deliver," "orders," "backlog," "comfortable," "trend", and "seeks," or the negative of such terms or other variations on such terms or comparable terminology. These forward-looking statements are based on our respective management's current expectations, estimates or forecasts about our businesses, the industries in which we operate and current beliefs and assumptions of management and are subject to uncertainty and changes in circumstances. Readers of this communication should understand that these statements are not guarantees of performance or results. Many important factors could affect actual financial results and cause them to vary materially from the expectations contained in the forward-looking statements, including those set forth in this communication. No assurances can be provided as to any result or the timing of any outcome regarding matters described in STERIS's or the Company's securities filings or otherwise with respect to any regulatory action, administrative proceedings, government investigations, litigation, warning letters, cost reductions, business strategies, earnings or revenue trends or future financial results. Unless legally required, STERIS and the Company do not undertake to update or revise any forward-looking statements even if events make clear that any projected results, express or implied, will not be realized. These risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation:
• the failure to obtain the Company's stockholder approval of the proposed
transaction;
• the possibility that the closing conditions to the proposed transaction may not
be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant a necessary regulatory approval and any conditions imposed on the combined entity in connection with consummation of the proposed transaction;
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• delay in closing the proposed transaction or the possibility of
non-consummation of the proposed transaction;
• the risk that the cost savings and any other synergies from the proposed
transaction may not be fully realized or may take longer to realize than expected, including that the proposed transaction may not be accretive within the expected timeframe or to the extent anticipated;
• the occurrence of any event that could give rise to termination of the merger
agreement;
• the risk that shareholder/stockholder litigation in connection with the
proposed transaction may affect the timing or occurrence of the proposed transactions or result in significant costs of defense, indemnification and liability;
• risks related to the disruption of the proposed transaction to STERIS, the
Company and our respective managements;
• risks relating to the value of the STERIS shares to be issued in the
transaction;
• the effect of announcement of the proposed transaction on our ability to retain
and hire key personnel and maintain relationships with customers, suppliers and
other third parties;
• the impact of the COVID-19 pandemic on STERIS's or the Company's operations,
performance, results, prospects, or value;
• STERIS's ability to achieve the expected benefits regarding the accounting and
tax treatments of the redomiciliation to
• operating costs, Customer loss and business disruption (including, without
limitation, difficulties in maintaining relationships with employees, Customers, clients or suppliers) being greater than expected following the Redomiciliation;
• STERIS's ability to meet expectations regarding the accounting and tax
treatment of the Tax Cuts and Jobs Act ("TCJA") or the possibility that
anticipated benefits resulting from the TCJA will be less than estimated;
• changes in tax laws or interpretations that could increase our consolidated tax
liabilities, including changes in tax laws that would result in STERIS being
treated as a domestic corporation for
• the potential for increased pressure on pricing or costs that leads to erosion
of profit margins;
• the possibility that market demand will not develop for new technologies,
products or applications or services, or business initiatives will take longer,
cost more or produce lower benefits than anticipated;
• the possibility that application of or compliance with laws, court rulings,
certifications, regulations, regulatory actions, including without limitation any of the same relating to FDA, EPA or other regulatory authorities, government investigations, the outcome of any pending or threatened FDA, EPA or other regulatory warning notices, actions, requests, inspections or submissions, or other requirements or standards may delay, limit or prevent new product or service introductions, affect the production, supply and/or marketing of existing products or services or otherwise affect STERIS's or the Company's performance, results, prospects or value;
• the potential of international unrest, economic downturn or effects of
currencies, tax assessments, tariffs and/or other trade barriers, adjustments or anticipated rates, raw material costs or availability, benefit or retirement plan costs, or other regulatory compliance costs;
• the possibility of reduced demand, or reductions in the rate of growth in
demand, for STERIS's or the Company's products and services;
• the possibility of delays in receipt of orders, order cancellations, or delays
in the manufacture or shipment of ordered products or in the provision of
services;
• the possibility that anticipated growth, cost savings, new product acceptance,
performance or approvals, or other results may not be achieved, or that transition, labor, competition, timing, execution, regulatory, governmental, or other issues or risks associated with STERIS's and the Company's businesses, industry or initiatives including, without limitation, those matters described in STERIS's and the Company's respective Annual Reports on Form 10-K for the year endedMarch 31, 2020 andJuly 31, 2020 , respectively and other securities filings, may adversely impact STERIS's and/or the Company's performance, results, prospects or value;
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• the impact on STERIS and its operations, or tax liabilities, of Brexit or the
exit of other member countries from the EU, and STERIS's ability to respond to
such impacts;
• the impact on STERIS, the Company and their respective operations of any
legislation, regulations or orders, including but not limited to any new trade or tax legislation, regulations or orders, that may be implemented by theU.S. administration orCongress , or of any responses thereto;
• the possibility that anticipated financial results or benefits of recent
acquisitions, including the acquisition of Key Surgical, or of STERIS's restructuring efforts, or of recent divestitures, or of restructuring plans will not be realized or will be other than anticipated;
• the effects of contractions in credit availability, as well as the ability of
STERIS's and the Company's Customers and suppliers to adequately access the
credit markets when needed;
• STERIS's ability to complete the acquisition of Company, including the
fulfillment of closing conditions and obtaining financing, on terms
satisfactory to STERIS or at all; and
• other risks described in STERIS's and the Company's respective most recent
Annual Reports on Form 10-K and other reports filed with theSecurities and Exchange Commission .
Readers are cautioned not to place undue reliance on any forward-looking statements included in this communication, which speak only as of the date of this communication. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law. This cautionary statement is applicable to all forward-looking statements contained in this communication.
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